Presented by: Arvind Singh Shivani Pandey Srishti Garbyal

The process of redesigning one or more aspects of a company.

Any change in the business capacity or portfolio that is carried out by inorganic route. Any change in the capital structure of a company that is not in the ordinary course of its business. Any change in the ownership of a company or control over its management.

Implemented due to a number of different factors, such as positioning the company to be more competitive, survive a currently adverse economic climate, or poise the corporation to move in an entirely new direction.

Mergers / Amalgamation Acquisition and Takeover Divestiture Demerger (spin off / split up / split off) Reduction of Capital Joint Ventures Buy back of Securities

In the early 1990s, Arvind Mills initiated massive expansion of its denim capacity. By the late 1990s, Arvind Mills was the third largest manufacturer of denim in the world, with a capacity of 120 million meters. However, in the late 1990s, due to global as well as domestic overcapacity in denim and the shift in fashion to gabardine and corduroy, denim prices crashed and Arvind Mills was hit hard. The expansion had been financed mostly by loans from domestic and overseas institutional lenders. In 2000, the company had a total debt of Rs 27 billion, of which 9.29 billion was owed to overseas lenders.

In 1997, Arvind undertook a major expansion plan of setting up a Rs 1,000 crore complex in Gujarat. There were overruns due to depreciation of the rupee, denim entering a downward cycle (fashion of corduroy and cotton) and flooding in the area where the complex was being built. This led to an accumulated loss of over Rs 500 crore. Deep financial trouble because of its increasing debt and interest burden. Its total long-term debt was estimated at Rs 27 billion, out of which the total overseas debt was Rs 9.29 billion and debt to Indian institutional lenders was Rs 17.71 billion. Arvind Mills had defaulted on interest payments on every loan. ICICI was the largest Indian institutional lender, with a loan of over Rs 5 billion to Arvind Mills. In 2000, the company reported a net loss of Rs 3.16 billion against a profit of Rs.14 billion in 1999.

Entry into industrial or performance fabric (restructured the shirting fabric, khaki fabric and knits business) Focus on growing the existing brands and retail vertical i.e. portfolio development. Unlocking value from the real estate (monetisation of surplus land). De-leveraging of the balance sheet. Outsourcing of non-core activity. Global sourcing to optimize quality and costs. While the company set itself a minimum debt buyback target of Rs 5.5 billion, the management was hopeful of a larger amount, possibly Rs 7.5 billion. In mid-2001, Arvind Mills got the approval of a majority (43/54) of the lenders for its debt restructuring scheme. The debt revamp was expected to reduce Arvind Mills interest burden by 50%.

Post restructuring, Arvind reported a profit of Rs. 10 crore for the first quarter of the financial year 2002, after a gap of three years. Also, Denim had started to come out of its downward cycle. It is a lucrative business, but cyclical in nature. Implementation of ERP, SAP.

Two hundred and forty million metres of cotton fabric. Eight million pieces of garments. Megamart, the value retail chain. Strong portfolio of international apparel brands, including Arrow, US Polo, Izod, GANTT, Tommy Hilfiger, and Elle. Cash flows of Rs.255 crore. Stringent quality standards and well equipped testing facilities to ensure adherence to these standards for inward-materials. While procuring the dyes and chemicals it also ensures that internationally accepted Eco-norms are met with.

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